The Omega Division is producing and selling at capacity. What is the minimum selling price that the division would consider as a “transfer price” to the Beta Division on which no variable period costs would be incurred?P78P92P117P133 The Omega Division of Alpha Company produces a high-quality kite. Unit production costs(based on capacity production of 100,000 units per year) follow:Direct materialsP 60Direct labor25Overhead (20% variable)15Other informationSales priceSelling expenses (15% variable)12020

Cost Benefit of transferring to Beta Division = Variable Selling expenses = P20 x 15% = P3

The Omega Division is producing and selling at capacity. What is the minimum selling price that the division would consider as a “transfer price” to the Beta Division on which no variable period costs would be incurred? P78 P92 P117 P133

The Omega Division is producing and selling at capacity. What is the minimum selling price that the division would consider as a “transfer price” to the Beta Division on which no variable period costs would be incurred? P78 P92 P117 P133

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

P78
P92
P117
P133

The Omega Division of Alpha Company produces a high-quality kite. Unit production costs
(based on capacity production of 100,000 units per year) follow:
Direct materials
P 60
Direct labor
25
Overhead (20% variable)
15
Other information
Sales price
Selling expenses (15% variable)
120
20

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